Seconds out: new 'challenger' 86,400 bank targets big four's turf

The founder of two United Kingdom "challenger" banks will chair the latest Australian digital start-up planning to become a bank and pinch a slice of the big four's profit pool of more than $30 billion a year.

Amid a boom in fintech investment, a new financial business called 86 400, which hopes to become a mobile digital bank, was unveiled this week.

The company is chaired by Anthony Thomson, the founder of UK lenders Atom Bank and Metro Bank, which are among a group of smaller banks that have emerged in recent years to challenge the incumbents.

86 400, which is fully owned by payments company Cuscal, said it would aim to offer transaction and saving accounts from early next year, once it was able to obtain a full retail banking licence from the Australian Prudential Regulation Authority.

Advertisement

Its pitch to customers is that it will be "technology-led from the start" and based around the smart phone, which will lower costs because it will not have the expense of branches or older systems used by traditional banks.

The business name 86 400 is a reference to the number of seconds in a day - it claims the tech-based approach will help get customers what they value most, around the clock.

Loading

Mr Thomson decided to move to Australia about two years ago, and said he was struck by the high level of profitability among the local banks, and the way customers were treated.

"It was clear to me, as I started to look into banking in Australia, how it just makes the UK banks look like they look after their customers," he said.

Mr Thomson said he had been struck by 2016 analysis from the Australia Institute, a left-leaning think tank, that found the local banks' profits made up 2.9 per cent of gross domestic product (GDP), the highest proportion among a list of 10 major developed economies.

"It's just an extraordinary rip-off," he said, pointing out it was about three times more than the proportion of GDP the UK banks made in profit.

The chief executive of 86 400 will be Robert Bell, who was previously the chief of ANZ Bank's Japan business.

Cuscal-backed 86 400 is the latest fintech business aiming to take on the big four.